Aerospace, Defense and Government Services
McKenna Long & Aldridge LLP (MLA) is home to the first dedicated Government Contracts practice in the United States and our Corporate Transactional practice is a cornerstone of our international law firm. MLA regularly combines these strengths to represent clients operating in the federal space across the complete spectrum of business transactions, including those unique to companies that do work for the federal government. MLA’s corporate and government contracts attorneys have extensive experience working with government contractors to pursue, negotiate and close mergers and acquisitions, joint ventures, strategic alliances and teaming agreements, and pursue debt and equity securities offerings (both public and private). We have extensive experience structuring and negotiating public-private partnerships with various U.S. government, state and local agencies and authorities. In addition to the internal investigation work performed by the government contracts attorneys to ensure compliance with U.S. government contract specific requirements, we routinely organize and implement traditional internal corporate financial and ethical investigations. Our corporate and government contracts attorneys work in an integrated and interdisciplinary manner to advise clients on the special issues that affect government contractors, including with respect to due diligence matters, contract compliance and novation requirements, security clearance issues, and special representations and warranties, indemnities and other contractual provisions.
We have extensive experience advising clients in connection with sale transactions, whether the sale involves the client’s entire business enterprise or is limited to specific subsidiaries or divisions. This experience includes working closely with clients and their financial advisors in connection with establishing, or participating in, auctions or competitive bid processes. Our mergers and acquisition (M&A) services cover the full life cycle of a transaction, including:
- Assisting in transaction structuring, including analyzing regulatory, accounting and tax implications of alternative structures, as well as addressing particular issues attendant to selling business lines, divisions and subsidiaries;
- Organizing and conducting pre-sale legal self-due diligence investigations, including risk assessments with respect to contract matters, regulatory compliance and pending or threatened litigation, which oftentimes enables us to identify and resolve issues prior to (rather than in the midst of) a sale process;
- Negotiating and drafting all transaction documents, including the primary purchase and sale agreement, transition services agreements typically required in subsidiary/division sales, non-competition agreements and all other ancillary agreements and documentation;
- Assisting in all tasks required to close the transaction, including obtaining Hart-Scott-Rodino and all other regulatory and third-party consents, documenting all required transfers of assets and assumptions of liabilities, obtaining necessary board and shareholder approvals, and implementing employee benefit transition strategies; and
- Advising clients with respect to post-closing obligations and rights, including purchase price adjustments and indemnification obligations, as well as transition matters.
Key Transactional Issues for the Government Contracting Industry
Structuring, negotiating and closing deals involving government contractors requires understanding and mastery of the special issues affecting those transactions. We are well positioned to advise clients on a full array of those issues, including:
- Special legal due diligence issues, including truth in negotiation and false claims issues, security clearance matters, detailed analysis of government contracts and intellectual property matters.
- Novation issues, both analysis of when needed and how to navigate the process and tailoring of those agreements to allocate the risk of post-closing liabilities among the purchaser, the seller and the government.
- Special financial due diligence issues, including cost accounting standards, contract valuation and cost of acquisition issues.
- Evolving foreign ownership issues, including CFIUS, Exon-Florio and FOCI matters including counsel specific to Department of Energy’s (DOE) unique perspectives and concerns on the application of these rules to foreign involvement in the work at its sites and labs.
- Treatment of environmental liabilities that requires an understanding of the contracts with DOE, the applicable environmental statutes and regulations and DOE’s approach to environmental compliance and the regulators.
- Security clearance issues, including transferring and obtaining clearances in connection with transactions.
- Impact of the Federal assignment of claims statute and related loan structuring issues.
- Special representations and warranties, indemnity and other contractual provisions.
- Government contracting and corporate compliance programs, both examination of existing programs and structuring and implementing new programs.
- Service Contract Act and Davis-Bacon Act compliance and related issues.
- Recertification requirements and other issues related to SBA, 8(a) and other set-aside programs.
Transactional Experience for Government Contractors
Our attorneys excel in a wide variety of transactional areas relevant to the government contracting industry:
- Mergers and acquisitions
- Joint ventures and teaming agreements
- Cross-border transactions
- Securities offerings
- SEC reporting and compliance
- Project finance
- Corporate governance matters
- Secured and unsecured financings
- General commercial and contractual matters
- Privatization and public-private partnerships
- Distressed transactions, including bankruptcy
Among the transactions our attorneys have handled:
- Representing buyers and sellers - both strategic investors and private equity, hedge fund and other financial investors - in M&A transactions within the government contracting industry.
- Representing DOE contractors with mergers and sales of assets, providing government contract and federal regulatory counseling.
- Representing management in leveraged buyouts and recapitalizations of government services companies.
- Representing a leading developer of privatized military housing on U.S. military installations.
- Representing lenders in secured and unsecured financings of government contractors and borrowers in financing and capital formation transactions.
- Representing clients in corporate governance and contractor ethics matters.
Other Unique Attributes of Government Contracts Transactional Practice
Client service and positive results are our highest priorities. Our reputation has been earned by partnering with our clients to truly understand their business priorities and legal needs. Each client receives individualized attention and focus to ensure that its transactions are negotiated and executed with its specific business goals in mind. Our depth and breadth of experience in government contracts elevates our ability to accomplish our clients’ goals in transactions involving government contractors. Our attorneys and professional staff have access to appropriate government channels and officials for the latest government contracts and security issues. Regular contact with government personnel at all levels provides us with unparalleled access and knowledge of all legal issues relating to government contracts: formation, performance, protests, contract claims and litigation, government investigations and compliance. We also focus on international construction, state and local matters, as well as public health issues. Because of our experience, we are uniquely qualified to identify government contracts issues, risks and opportunities that may be missed by a transaction team that includes only corporate lawyers.
Our attorneys have published the “Corporate Governance Quick Reference Guide”, “Mergers and Acquisitions Quick Reference Guide”, and co-authored “SOX and Companies Selling to the Government”.
Recent firm recognition by clients includes:
- Tier One Ranking of the Government Contracts practice in Chambers USA.
- Tier One Ranking of the Corporate practice (M&A) in the South Atlantic Region by the Legal 500.
Representative Engagements
Corporate Transactions Involving Government Contractors
- Represented Capital City Technologies in its sale to Ernst & Young, LLP. Capital City Technologies, which provides high-end strategic program management, financial compliance, ERP integration, and financial management services to various agencies and divisions of the United States Department of Defense, joined Ernst & Young’s government and public sector advisory group.
- Represented Lockheed Martin Corporation in the closing of its United Kingdom Public-Private Partnership project. The company and a United Kingdom defense contractor formed a joint venture to partner with the United Kingdom Ministry of Defense on a program with an estimated value of $12 billion.
- Represented Golden Gate Capital, a leading private equity fund with $9 billion under management, as special counsel in connection with its recent acquisition of CH2MHill's geospatial engineering and consulting business, now know as Critigen. Our representation included general government contracts matters, security clearance issues, employee benefits, tax and immigration matters, and technology issues.
- Represented Balfour Beatty Communities in its acquisition of Lackland (TX) AFB privatized housing project from the former developer, the restructuring of the project’s existing debt and the financing of the second phase; and in its acquisition of Leonard Wood Housing, LLC and restructuring of the $200 million-plus bond financing for the company’s military housing assets.
- Represented i2S, Inc., a provider of IT and operational support services to the federal intelligence community, in a management buy-out.
- Represented GMH Communities Trust in the sale of its military housing business to a UK public company.
- Represented Global Analytic IT Services, Inc. in the sale of its federal intelligence division to DC Capital Partners.
- Represented The Avascent Group, a leading provider of strategy and management consulting services to global leaders in defense, aerospace, logistics, transportation, and high technology, in the management-led buyout of DFI Corporate Services.
- Represented Engineering Support Personnel, Inc., a provider of engineering and technical systems support to a diverse set of federal customers across the United States Navy, Marine Corps and Army, and Department of Energy, in the sale of the company to Pine Creek Capital Partners.
- Represented DTI Associates, Inc., a provider of engineering, technology, and professional services primarily to the United States government, in the sale of the company to Haverstick Consulting, Inc.
Engagements as Special Government Contracts Counsel in M&A Transactions
- Currently representing ON Semiconductor in connection with government contracts and security clearance issues related to its recent acquisition of AMI Semiconductor.
- Represented ITT Industries, Inc. in connection with its acquisition of Eastman Kodak Company's Remote Sensing Systems operation.
- Represented Pacific Architects and Engineers Inc. in connection with PCL/FCL security clearance reorganization issues in anticipation of its sale to Lockheed Martin Corporation.
- Represented Cantronic Systems in connection with export control issues related to its acquisition of QWIP Technologies.
- Multiple engagements with each of Orbital Sciences Corporation and Hughes Network Systems to advise on government contracts matters in connection with M&A transactions.
Other Recent Representative M&A Transactions
In addition to M&A deals specific to the federal sector, our Corporate attorneys represent a wide range of publicly and privately held companies, as well as government entities, in connection with all types of strategic corporate transactions. The following is a representative list of MLA's recent transactional engagements:
- Represented the federal government of Canada in connection with both (i) the court-supervised sale of Chrysler in which the Canadian government (along with the government of Ontario) provided a $3.8 billion loan to, and acquired an equity investment in, the new Chrysler, and (ii) the court-supervised sale of a majority interest in General Motors to the U.S. Department of Treasury, in which the Canadian government (along with the government of Ontario) provided a $9.5 billion loan to, and acquired an equity investment in, the new General Motors.
- Represented Open Text Corporation (NASD: OTEX) in numerous merger and acquisition transactions of private and public targets, including its acquisition of Captaris, Inc. (NASD: CAPA) and its $325 million acquisition of Vignette Corporation (NASD: VIGN).
- Represented Osiris Therapeutics, Inc., a leading stem cell research company, in the sale of substantially all of its assets based upon the revenue contribution of the Osteocel business to NuVasive (NASD: NUVA). The transaction was valued at up to $137 million.
- Represented Osiris Therapeutics Inc. in an agreement to commercialize two of its adult stem-cell products. This deal with Genzyme Corp. (NASD: GENZ) provided for an upfront payment of $130 million, with an ultimate value estimated to reach $1.25 billion.
- Represented HD Supply, Inc. in the acquisition by HD Supply's White Cap business of substantially all of the assets of ORCO Construction Supply, Inc., an independent supplier to construction professionals in California, Arizona and Nevada.
- Provided legal counsel to Coca-Cola Enterprises’ (NYSE: CCE) Affiliated Transaction Committee in connection with Coca-Cola Enterprises’ sale of its North American operations to Coca-Cola Company (NYSE: KO) in a deal valued at more than $13 billion.
- Represented Elavon, a wholly owned subsidiary of U.S. Bancorp (NYSE: USB) and a leading global payments provider, in its joint merchant services alliance in Mexico with Banco Santander.
Advisories
- April 8, 2011
- April 6, 2011
- February 4, 2010